The European Union has also criticized Iran over its "destabilizing" ballistic-missile program, its "hostile activities" in several EU member states, and its meddling in countries in the Middle East.

The state has played up this year's anniversary as 40 is symbolic of maturity in the Islamic tradition and the age at which Prophet Mohammed received revelations from God.

Iranians celebrated the 1979 overthrow of Shah Mohammad Reza Pahlavi, who was supported by the US, "waving Iranian flags, chanting "Death to America" and burning USA and Israeli flags", reported The Associated Press.

"The US should know that we would raze Tel Aviv and Haifa to the ground in the event of a military attack on us", General Yadollah Javani, head of the guard's political bureau, was quoted as saying.

Despite Iran's efforts to hide the facility, Israel has nevertheless discovered, tracked and uncovered it, the network said, as part of its effort to thwart Iran's military entrenchment in Syria.

Trump´s chief foreign policy adviser said on Monday the Islamic revolution inflicted four decades of "failure and broken promises" on the country. 40 years of terror.

According to Channel 12 news, the factory is meant to focus on producing precision missiles, dramatically upgrading the threat to Israel from the vast arsenal of rockets and missiles deployed against it in southern Lebanon by Iran's proxy, Hezbollah. "The long-suffering Iranian people deserve a much brighter future", Trump posted on Twitter in both English and Farsi.

Hundreds of thousands of Iranians held nation-wide rallies on Monday to mark the 40th anniversary of the fall of the Shah and the triumph of Ayatollah Ruhollah Khomeini, the Shi'ite cleric who led an Islamic Revolution that rattles the West to this day.

"Were this regime to make the awful mistake of trying to destroy Tel Aviv and Haifa, it would not succeed, but it would mean that they had celebrated their last Revolution Day".

Pictures on social media showed some people also demonstrating against corruption, unemployment and high prices.

Prices of basic foodstuffs, particularly meat, have soared since President Donald Trump withdrew Washington from the 2015 nuclear deal a year ago and reimposed economic sanctions.

Israel and Iran traded threats of mutual destruction on Monday as the Islamic Republic celebrated the 40th anniversary of its revolution.

"The Iranian people have and will have some economic difficulties [due to the sanctions] but we will overcome the problems by helping each other", Rouhani said in his address. "They should take that into account", Netanyahu said, as reported by Haaretz.

Regional power Saudi Arabia and other Arab countries have viewed Iran with great suspicion since the Islamic Revolution swept the Shah from power, fearing Khomeini would inspire Islamic militants across the region.